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Can Rally Run Without Revenue?

Investors Wonder Whether Profits Based on Cost Cutting Can Long Endure

By

Tom Lauricella

Updated Aug. 31, 2009 12:01 a.m. ET

As stock investors turn their focus to earnings prospects for the second half and 2010, they are zeroing in on one of the market's biggest challenges: lackluster corporate revenue.

The market barreled ahead this summer and is hovering near its high for the year, fueled in large part by stronger than-expected second-quarter earnings. But a significant driver of the good news was cost cutting. Many companies posted disappointing...